journal entry furniture purchased 7000
Answers
Answer:
Double-entry bookkeeping, in accounting, is a system of bookkeeping so named because every entry to an account requires a corresponding and opposite entry to a different account. This lesson will cover how to create journal entries from business transactions. Journal entries are the way we capture the activity of our business.
When a business transaction requires a journal entry, we must follow these rules:
The entry must have at least 2 accounts with 1 DEBIT amount and at least 1 CREDIT amount.
The DEBITS are listed first and then the CREDITS.
The DEBIT amounts will always equal the CREDIT amounts.
For another example, let’s look at the transaction analysis we did in the previous chapter for Metro Courier (click Transaction analysis):
1. The owner invested $30,000 cash in the corporation. We analyzed this transaction by increasing both cash (an asset) and common stock (an just equity) for $30,000. We learned you increase an asset with a DEBIT and increase an equity with a CREDIT.
. Purchased $5,500 of equipment with cash. We analyzed this transaction as increasing the asset Equipment and decreasing the asset Cash. To increase an asset, we debit and to decrease an asset, use credit.
. Purchased a new truck for $8,500 cash. We analyzed this transaction as increasing the asset Truck and decreasing the asset Cash. To increase an asset, we debit and to decrease an asset, use credit.
Journal entry
Explanation:
Books of (----Limited)
Journal Entry
Date Account Title and Explanation Debit Credit
Furniture A/c Dr. 7,000
To Cash / bank A/c 7,000
(Being furniture purchase from cash or bank)
Note: Furniture comes to business so, the furniture account will be debit and the cash account will be credit.
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